New 100% Rules: The Revival Formula for Restaurant Crisis

“Income is not as important as the remainder” - a billion-dollar business tracker 'Mr. Kong-Akonrat Nitiphon' Those who are familiar with food business owners, both small and large brands, from stand-alone restaurants to restaurants with hundreds or thousands of branches nationwide, said when we asked how restaurants can survive in this COVID-19 era, it made us look back at our restaurants again to see how much revenue we have left. Khun Kong explained the 100% rule, which is the heart of restaurant management, and shared business experiences from various food businesses that had to turn the crisis into an opportunity, which is an inspiration for restaurant owners who are facing the Covid-19 crisis to have the strength to fight together.

See the opportunity when COVID-19 makes everyone equal Amidst the virus situation that has affected normal life, it has affected various sectors like dominoes, such as the restaurant business that cannot escape. Whether it is a small or large brand, the storefronts can only provide limited service, including take-away and delivery that have to adjust their strategies like never before. All restaurants have to experiment the same. “The advantage of businessmen who think positively about COVID-19 is the equality of restaurants. Both small and large brands are affected the same. But if you look deeper, you will find that they are hit harder or lighter. If it is a buffet, sukiyaki, and shabu restaurant, it is quite hit hard because it is not suitable for delivery, including Japanese food. But some cases benefit, especially fast food.” “We have to admit that this COVID-19 has made business owners, especially restaurants, feel like they are in a state of war. The current situation and the post-COVID-19 situation, everyone knows one thing: it will not be normal anymore. We have to underline this because people's behavior has changed because there is delivery or people can cook at home now. And going out will not be the same.” “Everyone is hit by the same storm. Right now, the storefront may not be as important as online and reputation on social media. That means whoever makes it more interesting. Understand your community base better. That person has a chance. People who eat 3 meals a day may not eat the same food. That means everyone has the right to offer all day, all the time. New shops have the same rights as old shops. It depends on who finds their customers first. Whoever can make customers more engaged wins.”

Understand your own mind and the 100% rule to increase your chances of winning. At the heart of running a restaurant business in the COVID-19 era, Kong shared 3 principles that will help your business survive the crisis and increase your chances of success.

“If the restaurant business is 100%, it means that COG should not exceed 35% of sales, while COL is 15%, rent should not exceed 10-15%, and the remaining 10% that cannot be put into COG, together cost is 75% (25% profit). “If you have sales of 100,000 baht per month and use this formula, which is COG or Food Cost is 700,000 baht, rent is 15% or 30,000 baht, COL 15% is 30,000 baht, that means there are 2 employees. If it exceeds this, it is tiring. If COG is cheaper, COL can be increased. If the rent is cheaper, COG or COL can be increased. It must be controlled. This is the basic rule of managing a restaurant business.” However, the current situation has given rise to something new, which is a 30% delivery fee or an additional transportation fee, but the rent may be reduced by 30% from the normal rent, and the new situation allows only 1/3 of the total number of seats in the restaurant to be served. Such conditions cause the 100% rule to be rebalanced. And we have to understand the new knowledge that comes after this. New 100% rule: if everything is the same and delivery is added, it equals a minus 5%. Therefore, 30% of the cost must be reduced to meet the delivery cost, which requires reducing rent and COL, so that the restaurant can be placed on the Delivery Platform. In addition, the challenge is people. What to do with old employees? New skills must be set up. Most restaurants in Thailand have one person doing one job. In Japan, one restaurant uses two employees, in Europe four, because each person can do many things. Therefore, the new knowledge that must change is that people's skills must be diverse.

You have to understand your customers and understand the new knowledge that is emerging all of a sudden.
The world of COVID-19 has created a different way of life from before. Some things have to be changed to fit in with the new normal. This means that everyone must learn to adapt and understand the new knowledge that is emerging. Restaurants are the same, they must constantly seek new knowledge and adapt it under the basic rules. And this is the reason why... 3. Understand your customers and the new knowledge that is created. Every store must deliver. You have to put yourself in the Delivery Platform and understand that if you do, the cost will increase or you have to be able to deliver. You must first understand your customers. Doing business means understanding the nature of your customers. You need to understand who your customers are, including understanding that the expectations of the restaurant business are different from other businesses because restaurants are expected to keep everything the same, including taste, quality, and appearance of the food. One thing that needs to be managed for delivery is that customer expectations must be the same as in-store. One way to do this is to create a new menu just for delivery. Identity in the online world. It is not by nature for people to order delivery food every meal. And when they do order, there are many different shops, including home cooking, which is another trend that is coming. Therefore, the shop must be memorable. If you want to eat this, you must order from this shop. How can we make customers attached to our food and order our food all the time? How can we make it appear on the feed page? And more than that, how can we make it memorable and thought of? What to do when you can only accept 1/3 of customers because the seats must be spaced at least 1.5 meters apart, reducing the ability to accept customers to sit in the shop, plus customers who are confident in using the service at the shop will also be reduced. “After COVID-19, it will not be the same anymore because people's behavior has changed. We have to understand our customers and understand the new knowledge that has arisen: Delivery using a platform or delivery not using a platform, and adjusting the formula, the new 100% rule.”

Case study in the adaptation of famous brands
As a person who has been involved with food business owners, both small and large brands, from stand alone restaurants to restaurants with hundreds or thousands of branches nationwide, from his role as a young producer and host of a hundred-millionaire show, founder and executive of a Production House company, Kong has encountered ideas from food entrepreneurs, many of which were able to adapt promptly during the current COVID-19 situation. Examples of brands that were able to adapt quickly are Kouen Sushi Bar, Kap Khao Kap Pla, and Khiang. “Kouen Sushi Bar is a Japanese restaurant, which some people are not yet familiar with ordering Japanese food via delivery, while a restaurant with over 10 branches has to stock up on items in advance for weeks or months, with tons of items in stock. But Kouen Sushi Bar understands its customers that In addition to delivery, many people are now doing home cooking, so they are increasing the sale of raw materials, such as selling meat to make steaks and shabu at home, in order to generate cash flow and keep the business afloat. This helped support me and I heard that the bleeding has stopped.” “Kheang is a new restaurant in the Zen group, created for delivery, no need to sit and eat at the restaurant. It’s called Delco, with strict hygiene standards and 100% understanding of the rules, including understanding new consumer behavior. They are in locations where delivery is possible, such as gas stations and shophouses, not in shopping malls. The rent for the space is low, and there are fewer employees.” “With rice and fish In addition to making the menu easier to deliver, we also make frozen food that can be stockpiled and have launched a new brand called Charoen Kaeng to make the food more diverse and can be eaten at every meal. Or like the Shabu and Suki restaurants, there are promotions to buy food and get a pot free. This is an adaptation. "Right now, what everyone expects and encourages is that COVID-19 will disappear. The day everything returns, we must still be here. If we are not here, there will be no business to continue. One of the words that the father of the main character in the series Itaewon Class said is, as long as you are still alive, nothing is a big deal. Therefore, we must survive.”